Question

Indicate by letter whether each of the transactions listed below increases (I), decreases (D), or has no effect (N) on retained earnings. Assume the shareholders' equity of the transacting company includes only common stock, paid-in capital—excess of par, and retained earnings at the time of each transaction.

TransactionsN 1. Sale of common stock_____ 2. Purchase of treasury stock at a cost less than the original issue price_____ 3. Purchase of treasury stock at a cost greater than the original issue price_____ 4. Declaration of a property dividend_____ 5. Sale of treasury stock for more than cost_____ 6. Sale of treasury stock for less than cost_____ 7. Net income for the year_____ 8. Declaration of a cash dividend_____ 9. Payment of a previously declared cash dividend_____ 10. Issuance of convertible bonds for cash_____ 11. Declaration and distribution of a 5% stock dividend_____ 12. Retirement of common stock at a cost less than the original issue price_____ 13. Retirement of common stock at a cost greater than the original issue price_____ 14. A stock split effected in the form of a stock dividend_____ 15. A stock split in which the par value per share is reduced (not effected in the form of a stock dividend)_____ 16. A net loss for the year